Press Release Summary: Its official: the housing market is in crisis. At least, this is the not-so private view of housing minister Caroline Flint. If she had hoped to keep her briefing to the cabinet on the subject under wraps today, she might have done better than hold her notes just where the long lenses of numerous state-of-the art cameras outside 10 Downing Street were poised as she entered.
Press Release Body: Its official: the housing market is in crisis. At least, this is the not-so private view of housing minister Caroline Flint. If she had hoped to keep her briefing to the cabinet on the subject under wraps today, she might have done better than hold her notes just where the long lenses of numerous state-of-the art cameras outside 10 Downing Street were poised as she entered.
The freshly-snapped results indicated that Ms Flint believes the housing market will, \"at best\", be in for a decline of between five and ten per cent in price. Now the cat is out of the bag, many questions will be asked, not least by political opponents.
However, the notion that falling prices are necessarily bad news has been challenged by an opinion poll for the BBC ahead of this week\'s programme The Truth About Property. This found that just 22 per cent of respondents would like to see prices rise, compared to 28 per cent who would rather see a fall. (46 per cent felt a static situation would be the best outcome). The corporation noted that this may include some on the property ladder who could move up to the next rung at a more amenable cost.
But while some may not see falls in prices as bad at all, others expect price falls may be limited. This point was emphasised by Ian Perry, spokesman for the Royal Institution of Chartered Surveyors, following the news that last month 95.1 per cent more chartered surveyors reported a fall in house prices than a rise, the largest negative balance ever recorded.
What this missed, Mr Perry noted, was that while there were falls everywhere, these were not particularly large. He stated: \"Although most surveyors are now seeing price declines, the extent of the fall, is at this stage, quite modest.\"
A greater issue, Mr Perry suggested, was that posed by the lower volume of transactions, something he believed represented a good reason for the Bank of England to cut the base rate next month, although the likelihood of this may have been diminished by the news today that consumer prices index (CPI) inflation had hit three per cent. On the other hand the Bank predicted this in its February inflation report before making more rate cuts, stating that food and fuel prices would see CPI go \"up sharply in the near term\" before falling back, so it is possible they are willing to take the hit of Mr King needing to write an open letter to the chancellor under the MPC rules if CPI rises above three per cent, while focusing on the longer-term picture.
The overall analysis of Rics was very much in line with that of the National Association of Estate Agents, according to chief executive Peter Bolton King. He said: \"The house prices falls that are taking place are modest and the picture is still patchy with some areas of the country finding it tougher than others.\" Adding that the underpinning factors of comparatively low rates, high employment and pent-up demand were all still present, he predicted: \"Therefore, rather than a dramatic fall that some doom and gloom merchants are predicting, it shows we are looking at a return to a more steady market rather than the fantastic price hikes we have seen in the previous ten years.\"
It may or may not have surprised Mr Bolton King to learn that one of those \"doom and gloom merchants\" is the minister for housing. But even if Ms Flint is right and prices do fall substantially, it appears there are still some property owners who would be happy.
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2025
